A new survey by Lotlinx, a provider of data for automobile dealership inventory management with offices in Traverse City, showed few dealers use sophisticated analytical data to determine inventory.
Results showed 12.6 percent of dealers says they are using sophisticated analytical data to monitor vehicle days on the lot, combined with segment type, used or new, and other local inventory levels of similar vehicles.
The company’s Automotive Retail Industry Pulse Survey online survey in March was undertaken to better understand what automotive dealership professionals are facing in managing vehicle inventory. It also looked at the use of artificial intelligence and machine learning to help mitigate inventory risk.
Approximately, 31 percent of respondents said they still rely on gut instinct to manage their dealership’s vehicle inventory, and the majority (36.9 percent) said they continue to struggle with managing inventory for both new and used vehicles.
While 38.7 percent of respondents currently are using the capabilities of AI/ML or predictive modelling data to manage inventory and adjust pricing levels, another 36 percent are not, which Lotlinx says “reveals the increasing need for industry solutions to predict market factors that drive VIN outcomes in real-time.”
According to Lotlinx, its Sentinel VIN risk mitigation platform, which the company recently launched, already has helped dealers not only forecast inventory risks and implement corrective actions at the VIN level to reduce the time vehicles spend on lots, but also helped them earn higher profit margins and enhance competitive market performance.
Additionally, the largest number of respondents (44.1 percent) said they don’t feel confident in the current results they are receiving from current investments when understanding their largest inventory marketing pain point.
Sentinel is powered by the company’s AI-assisted chatbot, Lexaca. It was designed to offer comprehensive, market and competitive data for every vehicle on a dealer’s lot. The level of information in meant to enhance the customer experience and increase the likelihood of closing a sale, while also allowing dealerships to establish a pricing strategy that aligns with customer expectations and loyalty.
“These results tell us that auto dealers can no longer rely on manual methods, industry experience, and overall gut instinct to manage inventory and determine pricing,” says Jason Knight, CEO of Lotlinx. “By leveraging the power of AI through predictive analytics, auto dealers can anticipate demand fluctuations, enabling them to adjust inventory levels proactively, and we are committed to ensuring that dealerships are well-positioned to capitalize on industry shifts and emerging trends.”
To view the full survey results, visit here.
Click here to see the full survey results infographic.
